If you are shopping for a loan mortgage and unsure of what type of loan for, let not a loan officer simply tell you what they think, that you should choose, hoping that they give you an option that is in your best interest. Instead, take the time to examine these three issues, giving you a better chance to find the right mortgage for you.
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Obtaining the mortgage right for your individual situation may be a process of elimination by narrowing in mortgage lending programs that do not work with your situation and the possible identification those that will be. Ask yourself these three questions:
1 How long plan to live in my house?
If you buy a House, but plan on moving in five years or less, chances are an adjustable rate (ARM) mortgage can make sense. Many adjustable-rate mortgages start with an interest rate lower and have limits in place when the interest rate may change in subsequent years (it can only go up or down by a certain amount for any period of 12 months)as well as the limits on how much rates may rise during the term of the loan. It is common for adjustable mortgage rate limits allow your interest rates to rise or fall based on an index (e.g., LIBOR) anywhere from 1 to 2% per year, with a maximum increase of 5 per cent during the period of the loan.
2. What is my payment will be?
Each loan program has a different amount of money required for a down payment. How much money that you plan for a down payment will impact what loan programs are available. The most popular current requirements of down payment for some of the programs of mortgage loans are:
Loans - FHA, 3.5 %
Loans - USDA, 0
Loans - VA, 0
-Conventional loans, 5 %
HomePath - loans, 3 percent
With these loan programs, you can obviously put more money down that the minimum requirements and it can save you in the long term by eliminating mortgage insurance (for example, if you place a 20% down and get a conventional loan). You can play with different amounts of payments down and the amount of your loan that result by using a mortgage calculator.
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3. That House need repair?
With the large number of available housing which are either bank owned or sales in the open, more buyers found that the House they want to buy is in need of major before moving repairs. Two programs of popular loans for the purchase of a house in need of repairs are the FHA 203 k loan program and the program HomePath renovation loan.
HomePath renovation program is available only for homes that are currently the property of Fannie Mae and is available only by a limited number of lenders. The loan of 203 (k) FHA program is offered by lenders more and is available for houses other that those currently held by Fannie Mae, making this a much more popular option.
When you shop for a mortgage rate, do not leave everything up to a loan officer. Do your research and arm these three questions to ensure that you get the best possible mortgage for you program.
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